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Image Source : China Visual
BEIJING, October 21 (TMTPOST) — Companies with a small amount of housing-related business but not focusing on real estate business are allowed to raise funds in the A-share market, the China Securities Regulatory Commission (CSRC) announced on Thursday.
According to the CSRC, it will ensure that stock market financing is not invested in real estate business, and allow the following companies that have a small amount of real estate business but are not mainly engaged in real estate to raise funds in the A-share market.
For companies and their holding subsidiaries involved in the real estate, the proportion of real estate business revenues or profits in the most recent year does not exceed 10% of total revenues or profits for the enterprise.
For companies with their subsidiaries involved in real estate, investment income generated by real estate business in the most recent year does not exceed 10% of total profits.
Over the years, the CSRC has fully implemented the deployment of the Central Committee of the Communist Party of China and the State Council, adhered to the principle that houses are for living in, not for speculation, so as to promote the stable and healthy development of the real estate market.
Equity financing policies for housing-related enterprises must not only strictly limit the equity financing of enterprises with real estate as their main business, but also maintain effective capital market financing and ensure the stability of the economy in general.
Market participants said that housing-related enterprise financing is no longer one-size-for-all. After the relaxation of the policy, the financing scale might not be large, but it helps boost industry confidence.
After the State Coucil"s Notice on Firmly Curbing the Surge in Housing Prices in Some Cities was released in January 2010, the CSRC required real estate companies to consult the Ministry of Land and Resources before their IPOs and refinancing, their property development also required further inspection by the Ministry of Housing and Construction, leadng to a halt to the equity financing of real estate companies.
